Does my right hon. Friend agree that such an increase in social security spending is not sustainable? Will he consider two possibilities: first, redoubling his efforts to control social security fraud; and secondly—and perhaps more importantly—taking a leaf out of the book of the Secretary of State for Education and Employment, and establishing a national advisory committee to report to the House on social security matters?

My hon. Friend is right. We cannot let spending on social security increase at the rate that it has done since the system was established under Attlee in the late 1940s—5 per cent. a year on average in real terms. My reforms, however, have already reduced the rate of expenditure growth to little more than 1 per cent.—which is only half the growth of national income—so having been the principal engine of rising costs and tax, it is now set to leave scope for lower taxes as long as we avoid the pitfalls of the Labour party's proposals.

Will the Secretary of State accept that it is still a scandal that, in 1995, 46.1 per cent. of the social fund, which is to help people most in need in this country, goes on administration? Should we not have a scheme that gets more money to those people, who are so desperately in need?

I entirely agree with the hon. Gentleman that it is right to cut running costs. When it was announced about a week ago that we were hoping to cut
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such costs by a quarter, the Opposition Front-Bench spokesman said that it could not be done, that it would be damaging and that it would cause waste and delay. The Evening Standard today, however, has got hold of a letter to him from the shadow Chief Secretary, which says:
Following Peter Lilley's announcement last week that he is seeking to axe his department's running costs by a quarter, I have been making some informal enquiries about the feasibility of his plans.The advice I am getting … suggests that savings in running costs of this magnitude are perfectly feasible, given the opportunities for efficiency gains and the scale of investment already undertaken.
It is time for the hon. Memeber for Islington, South and Finsbury (Mr. Smith) to withdraw his statement that that would go past breaking point and cause longer delays, more mistakes and worse service.